The homeless industrial complex

AP Photo/Ben Margot

Homeless people are big business in cities like New York, San Francisco, and L.A.

Billions of dollars flow to nonprofits, bureaucrats, and contractors whose job it is to “solve” the homeless crisis.


You may have noticed that the homeless crisis is in no way being solved. There are multiple reasons for that, of course, and the biggest one is that people are homeless for a reason. They are often mentally ill, drug abusers, or themselves the victims of abuse.

The crisis itself is very real, both for the homeless people themselves and the people who have to live with them. Nearly everybody involved sees their quality of life get much worse, which is why citizens have kicked in billions of tax dollars a year to clean up the mess and help the people.

The one group of people whose lives are improved dramatically by the continuation of the crisis, though, gets all the money and makes all the decisions on how to spend it. They are doing very well indeed.

There are innumerable examples to prove this, but The New York Times has a story that illustrates the point perfectly.

The city funnels billions of dollars a year to organizations whose job it is to house the homeless, and the failure to achieve any progress ensures the money keeps flowing indefinitely.

The owner of a Brooklyn real estate company pleaded guilty this week to paying hundreds of thousands of dollars in kickbacks to a homeless-shelter operator in a yearslong scheme to profit from programs meant to help homeless people.

The real estate company owner, Sheina Levin, specialized in renting housing to nonprofit groups. On Thursday, she admitted to bribing Victor Rivera, the former leader of one of the largest nonprofit homeless-shelter contractors in New York City, to lease property from her company and tap into a stream of city funding earmarked for housing homeless people, according to papers filed in Federal District Court in Manhattan.

Mr. Rivera, the former chief executive of the Bronx Parent Housing Network, pleaded guilty last year to federal crimes related to the same scheme and was subsequently sentenced to 27 months in federal prison. His dealings with Ms. Levin, as well as a pattern of sexual assault and harassment accusations against him, were first detailed in a New York Times investigation in 2021.


It’s probably the sexual harassment that actually got him into trouble, given how tolerant everybody is with graft. Graft is what city budgets exist for. The city services are just the excuse to keep the gravy train going.

In previous court filings, federal prosecutors said Ms. Levin’s real estate company, Urban Residences Corp., had paid nearly $690,000 in bribes to Mr. Rivera, her onetime business partner, so that his group would rent a Bronx building she controlled.

The kickbacks were disguised as consulting fees to a company run by Mr. Rivera’s son, which had “few if any business expenses,” according to court filings. Prosecutors said the elder Mr. Rivera used the money to make mortgage payments on his home.

“This unscrupulous real estate company owner resorted to bribes and kickbacks to become the landlord of choice for a taxpayer-funded nonprofit that provides vital homeless shelter services,” said Jocelyn E. Strauber, the commissioner of New York City’s Department of Investigation, which investigated the case with prosecutors from the U.S. attorney’s office in Manhattan.

$690,000 isn’t chump change, of course, but it is just the tip of the iceberg when it comes to the graft involved. For all intents and purposes, very little of the money the city spends accomplishes much in the way of dealing with the problem the city is trying to solve. The goal is to get the homeless people back on their feet and get them off the street, where their presence reduces the quality of life for everybody else.


Not to put too fine a point on it, but New Yorkers are so concerned about dealing with the crisis because the homeless crisis makes life difficult for everybody else. While it would be nice to believe that people are dropping coins in the coffee cups to help a person down on their luck, people are paying exorbitant taxes in New York to live in a city that is supposed to work. It isn’t working for anybody.

As rates of homelessness have risen in New York, city officials have struggled to crack down on financial misconduct among some shelter contractors. Under a unique court order that requires the city to provide temporary housing to every homeless person, New York City farms out the operation of its shelters to dozens of nonprofit groups. In recent times, public spending on these groups has swelled to more than $2 billion a year.

$2 billion is a lot of money to dump into nonprofits, and you can rest assured that the money is accomplishing little. Homelessness has gotten worse, not better, court order or no. What has gotten better is the bottom line for the people in on the grift.

Mr. Rivera helped found the Bronx Parent Housing Network in 2000 on a shoestring budget, and he expanded the organization into one of the largest operators of homeless shelters in New York City. His organization received more than $274 million in city money to run dozens of homeless housing sites from 2017 to 2021.

But as the money flowed in, Mr. Rivera found an opportunity to get rich: He collected an annual salary of $453,000, drove a Mercedes-Benz leased by the nonprofit and steered millions of dollars in contracts to friends and associates.

Ms. Levin, his partner in a separate housing venture, was one of those associates.


This story is duplicated countless times and in countless ways and tells you everything you need to know about how corrupt our welfare state actually is. We often focus on the occasional incidences of welfare fraud committed by recipients, but those incidents pale in comparison to the amount of money that is simply skimmed off the top by the people who run the programs.

It’s not the poor people who are benefiting, but the people who are claiming to help them. Those people are getting rich, cushy government jobs with great pay and benefits, and in many cases kickbacks.

Here in Minnesota, we have an enormous scandal centered on an Ilhan Omar-associated group that stole hundreds of millions of pandemic relief money that was supposed to be spent on providing a substitute for the school lunch program during the school closures. A nonprofit that was essentially a Somali gang set up fake feeding centers that served almost nobody but collected hundreds of millions from the Minnesota government.

The government officials did almost nothing. It took the FBI to shut the scam down. Our Department of Education knew of the graft but was concerned with appearing racist and ticking off our Congresswoman.

Bill Glahn of the Center of the American Experiment has been a bulldog on the story, and I am linking a video he did summarizing what he has covered. I have set the video to play where he describes the political connections that the scammers used to get their fraud moving:


This is how the government-to-nonprofit complex works. Politically connected people conspire to use the suffering of others as an excuse to fleece the taxpayers of what is collectively billions of dollars. It is estimated that total fraud from pandemic relief funds alone amounts to hundreds of billions to over a trillion dollars in just 3 years.

And that doesn’t include the billions in yearly payments to nonprofits that accomplish little to nothing.

I call this process “farming the poor,” where poor people are the soil used to grow the billions of dollars that pop out of the ground every time you appeal to people’s compassion or desire for a better quality of life.

Poverty is an industry, not run by or for the poor people themselves, but for the benefit of those whose job it is to solve the problems.

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